You are here:

Exceptional, July-December 2012Heart of a pioneer, soul of a scientist

“We hate doing things in a consistent way. If it has to be done and sustained, we typically get bored.“Terry Kelly, CEO and President, W. L. Gore & Associates.

Gore has been called America’s most innovative company – and it’s all due to its unconventional management structure, led by CEO Terri Kelly.

Terri Kelly is the first to admit it. “I can talk forever,” laughs the CEO and President of W. L. Gore & Associates. And as the leader of America’s most innovative company*, Kelly has plenty to talk about.

There are two important things to know about Gore: the company develops cutting-edge products, and it accomplishes this using a truly unique management structure. As head communicator, among other roles, Kelly is taking this culture all around the world and into the virtual age.

Considering its impressive track record, the company has accomplished a lot in a relatively short time. In 1958, Wilvert (Bill) and Vieve Gore founded W. L. Gore & Associates and, in little more than a decade, had established sales offices in Los Angeles and London, a manufacturing plant in Germany and a licensing agreement in Japan.

In 1969, a Gore-designed cable allowed the Apollo 11 space shuttle to attach seismographic equipment connected to the lunar lander. That was the same year Bill’s and Vieve’s son, Bob Gore, began stretching a polymer called polytrafluoroethylene (PTFE) — a discovery that resulted in one of the world’s most adaptable and recognizable products: Gore-Tex.

But it’s not just product breakthroughs that have set Gore apart. The privately held company, with US$3b in revenue, is also known for its highly unconventional management structure. Relying on collaborative, cross-functional teams, innovation is not relegated to the laboratory but fostered in a variety of settings.

Driving innovation through culture

There are no employees, but rather “associates,” and Kelly is one of a very few to have a job title. Associates of the privately held company are offered associate stock ownership, and their compensation is determined by an unusual system of peer ranking and review. Small, self-managed, multidisciplinary teams drive innovation.

Gore is defined by this very innovation — in both the products it produces and its organizational systems. “Bill Gore was always thinking about how [the Gore culture] was going to allow us to be more innovative and a more effective enterprise,” says Kelly. “

Kelly leads by example, epitomizing the ideal Gore associate: she is a self-motivated, critical thinker who is devoted to the lattice-style management system.

As a mechanical engineer right out of the University of Delaware, Kelly was recruited by Gore as part of a new-graduate program. She took the job and never looked back. Eventually, she co-led the global fabrics division and helped established a manufacturing plant in Shenzhen, China.

Through a unique peer-selection process, she was selected as the company’s fourth CEO and President in 2005. As she describes it, leading Gore is not for the faint of heart. “My job is like herding cats,” she says. “It’s a very messy process. It looks very structured and logical and orderly, and it’s absolutely the opposite.”

This chaos stems from the Gore culture. Along with the four basic values mentioned above, the company believes in four principles: freedom, fairness, commitment and “waterline” (checking with other knowledgeable associates on critical decisions). Associates are driven by a passion for their work and a sense of responsibility to their teams and the company as a whole.

“Everyone [in the company] has the same value set and understanding of how we want to engage as associates,” she says. “When you empower folks who feel ownership — and are owners in the company — they’re not going to just sit back and listen to what I say or any other leader says.”

People before profit

Kelly ensures that Gore values take center stage even as the company grows. She is committed to maintaining individualism while working toward a common purpose.

That ultimate goal is not financial, however. “In fact, it’s quite the opposite,” she says. “We purposely put the financial objective last [among strategic objectives]. If you do all of those other things right — drive innovation, drive commitment to your associates and your environment — [financial success] is an outcome.”

Clearly, Kelly is not fazed by what it will take to evolve the company. It certainly helps that she grew up in the Gore culture, which questions, criticizes and embraces learning from failure. She has the heart of a pioneer and the soul of a scientist.

“[We’re continuing to] push the boundaries of where our material sets will take us, as well as exploiting those [technologies] in the markets we are already in,” she says. “We are a very diversified company. There are probably few markets we’re not in, in some way. If there’s a need for that material set, you’ll find us there.”

Still, she recognizes that this is just one way to run a company. She’s often asked how other organizations can become equally innovative. “What some fundamentally fail to recognize is you have to embrace the values first,” she says. “It’s not about our innovation tools and how many reviews we do and what kind of models we use. If you don’t have [the values] piece, you won’t get the benefit you think you’re going to get.”

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.